New Mexico

NOT HOLDING PUBLIC SALE: What if we go through all the proper lien procedures with a default tenant but instead of holding a public sale we decide to do donate the contents of the unit to a local fundraising rummage sale, or to charity, the needy or even going through the unit and separating some contents individually for sale on Craigslist or Ebay? Does anyone have thoughts on any restrictions or rules governing this?

Re: New Mexico

Originally Posted by manager2012

NOT HOLDING PUBLIC SALE: What if we go through all the proper lien procedures with a default tenant but instead of holding a public sale we decide to do donate the contents of the unit to a local fundraising rummage sale, or to charity, the needy or even going through the unit and separating some contents individually for sale on Craigslist or Ebay? Does anyone have thoughts on any restrictions or rules governing this?

I would refer to your state laws on this, it can be tricky!
For instance there is a HUGE difference in Florida between "Disposing of" and Disposal of"
See what is and isn't allowed once a lien process is carried through. Also make sure the wording in your lease is there and legal for your state.
I.E. "If payment is not received in full by XXX date the property will be put into a lien sale or disposed of"

We spent a good steady 8 mo. POURING over our state laws, honestly we couldn't go to the owner for help as he was not up to date on them. Tread carefully and GOOD LUCK!

Re: New Mexico

Originally Posted by manager2012

NOT HOLDING PUBLIC SALE: What if we go through all the proper lien procedures with a default tenant but instead of holding a public sale we decide to do donate the contents of the unit to a local fundraising rummage sale, or to charity, the needy or even going through the unit and separating some contents individually for sale on Craigslist or Ebay? Does anyone have thoughts on any restrictions or rules governing this?

Yes, manager2012, New Mexico statutes use several key terms that indicate that the sale be a public sale rather than a private sale or charitable donation. For example, 48-11-7. Enforcement of lien, says:

5) a conspicuous statement that unless the claim is paid within the time stated in the notice, the personal property will be advertised for sale or other disposition and will be sold or otherwise disposed of to satisfy the owner's lien.

This provision clearly indicates that the property be sold or disposed of if valueless. Subsection D continues to say:

D. After the expiration of the time given in the notice of intent to enforce a lien, the owner shall publish an advertisement of the sale or other disposition of the property once a week for two consecutive weeks in a newspaper of general circulation in the county where the self-service storage facility is located. The advertisement shall include:

(1) a brief and general description of the personal property reasonably adequate to permit its identification as provided in Paragraph (2) of Subsection B of this section, the address of the self-service storage facility where the personal property is located and the name and last known address of the occupant; and
(2) the time, place and manner of the sale or other disposition. The sale or disposition shall take place not sooner than fifteen days after the first publication. If there is no newspaper of general circulation in the county where the self-service storage facility is located, the owner shall post the advertisement at least ten days prior to the sale or other disposition in at least six conspicuous places in the neighborhood where the self-service storage facility is located.

Note that the publication requirement states that a time must be advertised. This means that the sale must be a public sale and that the public is invited to attend. You could conceivably publish a time in the newspaper advertisement stating that portions of the property would be listed for sale on EBay or Craigslist on or after the published time. However, New Mexico legislators seemed to contemplate a public sale of the property which is common.

Re: New Mexico

I am new to the business, and also located in New Mexico. The way I've been told and the way I read the statutes is where the "otherwise disposed of" comes in. I understand it to mean that you have to follow all the timelines and the final step is advertising in the newspaper with a set date and time. Once that date and time hits, how we dispose of the property is at the discretion of the company. I would see donating the property as "otherwise disposed of."

I know this is not the standard language in most other states, thus is not the standard way of viewing things. But New Mexico is, let's say, unique in their laws in completely incomprehensible ways.
Here's an example: New Mexico is one of 3 states (I do not know the others) that do NOT have disclosure laws for real estate. So when you're buying a house and the seller knows of a foundational issue, water issue, or electrical issue, they do not have to disclose it. It's purely on the buyer to figure everything out. They don't even have public records showing when the property was built! So the real estate agents have to estimate and have everyone sign disclosures saying the age of the house is only an estimate. Does not make any sense whatsoever to me.

Either way, please let me know if I'm reading this wrong. I, too, plan on donating the items from most of the "worthless" auction units, rather than having to actually auction them. Of course, I will jump through all the other hoops, time frames, and legal ads. But I think the final disposition of the property falls on the company.

Re: New Mexico

I don't know anything about New Mexico laws. However, if you were a tenant and for some reason unable to pay. Would you prefer your property be sold and you be given any excess over what you owe, or prefer the storage donate the property? If the tenant is short of cash, I would think that he/she would like any additional money over the costs of storage and sale. Yes I know, very few units are sold for more than the amount owing. One thing that you can do in the future, is ask your delinquent tenants if they are willing to sign over their property as paid in full. If they do that, you can do anything you want with it.

Re: New Mexico

@ manager2012 and ABQNathan

I wouldn’t go down the path you are considering on a bet. A wrongful sale can mean a seven figure legal settlement regardless of how or how much the unit goes for.

The word WILL is much stronger and pretty clear that something WILL happen. Example: The units WILL be advertised for sale and WILL be sold. Don’t let the word OR throw you off track. Now if the public sale was completed as advertised and there were no bids “OR disposed of” might come into play. When we get a unit with no bids, we ask three of the bidders to sign off on a No Bid Form. We call it the CYA

The other thing you need to consider, how is it spelled out in your rental agreement? If in doubt you should contact a legal adviser that is familiar with your state statutes. Storage owners and manager from coast to coast go to great lengths to be sure they are following ALL the rules. None of us want you reading about us in the news because we tried to short cut something.

Re: New Mexico

There was a auction service that approached me before about taking all the items out of the unit separate it into lots and sell it at their auction house. I talked to our attorney about the legality of doing something like that in Iowa, and found we could do something like this.

Basically you need to be able to account for all the items that left the unit, and be able to track the sales by unit. Overages would still be paid to tenants.

All that being said we never chose to go this route. It seems like far to much trouble than it was worth.